The following ratios were calculated for two competitors operating in the same industry, The standard sales terms in the industry is 1/7. n/30. East Ltd West Ltd 2019 2018 2019 2018 Average collection period 22.5 days 29.5 days 42 days 35 days Debt to total assets ratio 0.72:1 0.71:1 0.34:1 0.35:1 Times interest earned 5.45 times 7.69 times 16.55 times 9.69 times Required: a) From the calculated ratios above and given information, which company has better management of receivables, and why? (2 marks) b) From the calculated ratios above, which company has better chance of surviving over a long period of time, and why? (2 marks) 7 B 1 F O Answer: a)